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IAS 16 — Items not added to the agenda

Background

This page presents a summary of items not added to the IFRS Interpretations Committee's agenda in relation to IAS 16Property, Plant and Equipment together with the Committee's public explanation of the reasons for not adding those items to its agenda.

Related Discussions

The Interpretations Committee received a request to clarify whether the purchase of a right to use land should be accounted for as a purchase of property, plant and equipment, purchase of an intangible asset, or lease of land.

The Interpretations Committee received a request to clarify the accounting for sales proceeds from testing an asset before it is ready for commercial production. The submitted fact pattern is that of an industrial group with several autonomous plants being available for use at different times. This group is subject to regulation that requires it to identify a ‘commercial production date’ for the whole industrial complex. The question asked of the Committee is whether the proceeds from those plants already in operation can be offset against the costs of testing those plants that are not yet available for use.

The IFRIC received requests for guidance on the meaning of 'consumption of economic benefits' when determining the appropriate amortisation method for an intangible asset with a finite useful life. The methods considered in the submissions are the straight-line method and the unit of production method (including a revenue-based unit of production method).